Well, it does say "to access all features". This is probably a reference to their swap/exchange features they have. Blockchain can't enforce KYC on people (unlike exchanges) because they do give you a seedphrase so you can always move to another wallet (or so I think based on the last time I checked). But yes, it's not a wallet I would recommend using. There are way better alternatives out there.
It's definitely one of the worst Bitcoin wallets because in 2015-2016, when I was experimenting with Bitcoin wallets and I didn't know much about it, my first wallet was created on Blockchain info. One of them was working okay but another one had some problems. I couldn't login into that wallet anymore, I was receiving verification email, then I was clicking on it, verification approved but blockchain.info had some technical error only on that wallet and I couldn't login, doesn't matter how many times I tried. My another wallet still works fine today but I use Electrum for almost a decade already.
Btw this is definitely a preference to their swap feature. I've been receiving such emails since the day they implemented it. Sadly, I know many who uploaded their KYC documents to get $25 for free from blockchain. It was probably in 2018 if I remember correctly.
Never get attracted to use this wallet even since before since I don't think they are at least good option to choose.
Now that I heard they asked those things like what OP has mentioned, it gives me this impression that they would never offer safe platform to their user. So better for people to stick on their wallet which they have control on their seedphrase since for me this is the most safest wallet we can use.
Don't know if I receive the same email since I lost the first email I used to register in this platform before.